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A Century of Lawmaking for a New Nation: U.S. Congressional Documents and Debates, 1774-1875
Journals of the Continental Congress --THURSDAY, JANUARY 30, 1783
The committee, consisting of Mr. [Daniel] Carroll, Mr. [Nathaniel] Gorham, Mr. [Thomas] Fitzsimmons, Mr. [Alexander] Hamilton and Mr. [David] Ramsay, to whom were referred the memorials of the representatives of the Commonwealth of Pennsylvania, of the 28 of August and 12 of November last, reported an answer, which was agreed to as follows:
The memorial of the 28 of August states, that their constituents labour under grievances, because they are not enabled to settle their accounts against the United States, and because they cannot obtain payment of the debts due to them by the public, nor receive interest on loan-office certificates, dated subsequent to the month of February, 1778. It states further, that apprehensions had taken place, that the interest on certificates of a prior date, would be suspended; that other states made, and were making provision for ascertaining and paying sundry debts due to their citizens, and that the suspension of payments complained of, was a material impediment to the collection of taxes; after which follows a request that Congress will be pleased to devise and recommend such general plan as they shall think adequate and effectual, for settling and ascertaining the unliquidated debts of the United States, and for paying the same, or at least some part thereof, and also for the regular
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and punctual payment of the interest on all the public debts, as well on loan as otherwise, until the principal shall be finally discharged.
The subsequent memorial of the 12 November, after referring particularly to the former, and observing that the business was yet uneffected, declares the assembly to be deeply impressed with the absolute necessity, that speedy and effectual measures be taken to afford relief to the public creditors, at leash so far as to liquidate and ascertain their respective claims, and to secure to them the payment of the interest due thereon, until the principal be discharged; and then requests, that Congress will be pleased to give them such information as will enable the house to judge what steps it may be proper to take, in order to afford that effectual relief to the public creditors in Pensylvania, which they conceive it to be their indispensable duty to procure.
On these memorials Congress remark,
That the objects to which they relate must necessarily depend on the compliances of the several states with the requisitions of Congress:
who, not being possessed of legislative authority, are not competent to afford the desired relief.
That the interest payable by bills of exchange on loan office certificates
prior to the month of March, 1778, was expressly limited to a period which had fully elapsed when the cessation of the payment took place; that although from that circumstance alone the stoppage of such interest cannot be reprehended yet it was not prohibited.
continued until an express declaration made to Congress, that those who should draw bills for that purpose must provide for the payment of them:
That Congress are not informed of any State which has taken separate measures for satisfying its own citizens who are public creditors; and that there does not appear a possibility of making such a private and partial provision because
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the various certificates are principally made payable to the bearer of them, and have been transferred and negotiated. A provision for them by any State, must therefore exclude the demands of many of its own citizens, or admit the demands of all:
That the attempts to pay any of the past debts, would Form so heavy a deduction from the greatest revenue which can be raised, as would totally obstruct all present service. Wherefore, the provision to be made at present ought to be confined to the interest of the public debts:
That such provision would afford eventual relief to the public creditors, and enable them to support their share of the public burthens, without appropriating the whole revenue which can be drawn from the people, to a payment of debts, and leaving thereby the public service unprovided for, which would involve the ruin of all ranks, whether creditors or others:
That Congress are and have long been deeply impressed with the absolute necessity that speedy and effectual measures should be taken, first, to liquidate and ascertain the public debts, and secondly, to secure the payment of the interest, until the principal could be discharged, as will appear from the following facts:
That for the first of these essential objects Congress had made provision by their acts of the 20 and 27 February last, and have reason to believe, from the information contained in a letter from the office of finance, dated 3 December following, and the report of a committee thereon (both which are annexed) that the plan adopted will speedily be in an effectual train of execution throughout the United States:
That the duty of five per cent. was recommended by Congress so early as the 3d of February, 1781; and that important steps towards accomplishment of the second object would long since have been followed by other recommendations of a similar kind, but after a delay after a delay of near two
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years, Congress have the mortification to find, that the grant of this revenue is fettered with undue restrictions that one State entirely refuses its concurrence, that another has withdrawn its assent once given, and that a third has returned no answer:
That when Congress received the determination of the State of Rhode Island on that subject, they resolved to send a solemn deputation to that State, to induce a re-consideration of the measure. At the moment when the committee were about to depart, intelligence was received that Virginia had repealed the act formerly passed on that recommendation, which has placed the business on a new ground, and compelled Congress to take it up in a more extensive view.
The inability of Congress to perform the engagements taken with the public creditors will readily appear, when it is considered how defective have been the compliances of the states, in every period of the war.
It is to their deficiencies that may principally be attributed the rapid depreciation of paper money as well as the total abolition of it, and the pernicious expedients which Congress was driven to adopt.
Among the expedients dictated by a harsh necessity must be mentioned the drawing of bills of exchange on their ministers in France, Spain and Holland, without the knowledge of any funds for their acquittal. These bills being drawn at long sight and remitted at different periods have as well as the bills formed a very heavy deduction from the supplies granted to Congress by his Most Christian Majesty.
Without recurring to details previous to the year 1782, it will be sufficient to state the situation of the finances for that year, which is as follows: Congress, by their resolution of 30th of October, 1781, demanded eight millions of dollars for the service of the ensuing year. Without noticing the lesser neglects of their requisition, the annexed account will shew, that only 420,031 29--90 have been received.
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The precise state of monies in Europe cannot be ascertained, until the final settlement of the accounts there; because the bills drawn on Spain and Holland, having been finally paid, and made payable in France, the sum in livres of those which remained due at the close of the year 1781, and which had been drawn in guilders and dollars, must depend on the different exchanges between Amsterdam, Madrid and Paris. But, according to the best accounts which can be obtained, the anticipations made in the funds for the year 1782, amounted at the close of 1781, to four millions of livres. For the service of that year, his most Christian Majesty lent the United States six millions livres. In addition thereto, Mr. Adams opened a loan in Holland, for ten millions of livres, but, by the last accounts from him, he had obtained only three millions; so that the whole sum borrowed for the year 1782, being nine millions, there remained, after deducting the anticipations, only five millions, which, according to the course of exchange which has prevailed, will amount to 833,333 30--90 dollars.
By the annexed account of the receipts and expenditures for the year 1781, it appears that there were in the treasury, at the commencement of the year 1782, 292,453 69--90 dollars, so that the whole amount of the sums which Congress have had to carry on the public business for the year 1782, is no more than 1,545,818 30--90 dollars.
So that the three branches of feeding, cloathing and paying the army on its present establishment, would amount to
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5,713,610 32--90 without entering into the other branches of service, or considering the necessity of tents, firing, camp utensils, horses, carriages, forage, military stores, hospital, and the like.
The incompetency of the revenue will appear from a comparison of it with the sums necessary for feeding and cloathing the army, which services alone amount to above two millions and an half of dollars. And what must place the matter in a still more striking point of view, is, that the whole sum which Congress could command was not sufficient to pay the interest then due on the public debts. Every circumstance, therefore, which has hitherto retarded the measures which Congress have adopted for making provision for the public debts, has increased the necessity of making such a provision. And therefore, notwithstanding the discouraging obstacles they have hitherto encountered, they conceive it a duty to themselves and to their constituents, to persevere in their intentions, and to renew and extend their endeavours to procure the establishment of revenues equal to the purpose of funding all the debts of the United States. And they think it proper to inform the assembly of Pensylvania, that this subject is now before them, under solemn deliberation, and that the ready and early compliance of the legislature of Pensylvania, with the recommendation of the 3d February, 1781, assures Congress of the vigorous support of that State.
Among the steps taken by Congress to secure the debts incurred for the common defence, they must not omit to mention the recommendation of the 6 September, 1780, for a cession of part of the western territory, claimed by particular states. In consequence thereof, New York has made a cession accepted by Congress, the nature and extent of which will appear by the act herewith communicated.
Virginia and Connecticut have also made cessions, the acceptance of which have been hitherto delayed by peculiar
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circumstances. Other states, claiming western territory, have not yet complied with the recommendation. Congress cannot help calling the serious attention of the legislature of Pensylvania to that subject, which they consider as of importance, not only as it may affect the public credit, but as it will contribute to give general satisfaction to the members of the union. They intend also to renew their instances with the other states on the same occasion.1
[Note 1: 1 This report, in the writing of Thomas FitzSimons, is in the Papers of the Continental Congress, No. 20, II, folios 141--149. A draft of the report, in the writing of a clerk is in No. 49, folios 445--452.
The following paragraphs, in No. 36, II, folio 97, the first in the writing of James Wilson, the second in that of Richard Peters, are among several motions of which Thomson's indorsement states: "Some passed, some negatived:"
"Among the disagreeable expedients, which Congress were driven to adopt, the drawing bills of exchange en their Ministers in F[rance] S[pain and] H[olland] must be mentioned. These bills being drawn at a long sight, and remitted at different periods have, as well as the bills of interest finally come upon the Am. M. in France and formed a very [serious?] deduction from the supplies granted to C[ongress] by S.M.
Congress therefore earnestly recommend to the State of Pennsilvania not to entertain an idea of diverting the funds intended for the support of the war credit of the United States to the partial purpose of satisfying the demands of their own citizens which would not only embarrass the measures of Congress, but in its consequences tend to a dissolution of the Confederacy."]
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